Citi Trends, Inc.

Greetings. Welcome to CityTrend's first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Nitsa McKee, Senior Associate at ICR. Thank you. You may begin.

Thank you, and good morning, everyone. Thank you for joining us on CityTrend's first quarter 2026 earnings call. On our call today is Chief Executive Officer Ken Seipel and Chief Financial Officer Heather Platino. Our earnings release was sent out this morning at 6.45 a.m. Eastern Time. If you have not received a copy of the release, it's available on the company's website under the investor section at www.citytrends.com. You should be aware that prepared remarks made today during this call may contain non-GAAP information and forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance. Therefore, you should not place undue reliance on these statements. We refer you to the company's most recent report on Form 10-K and other subsequent filings within the Securities and Exchange Commission for a more detailed discussion of the factors that can cause actual results that differ materially from those described in the forward-looking statements. I will now turn the call over to our Chief Executive Officer, Ken Seipel. Ken?

Thank you, Nisa. Well, good morning, everyone, and thank you for joining us today for our first quarter 2026 earnings call. You know, simply stated, we had an excellent quarter. Building on the powerful momentum from 2025, nearly every metric accelerated during Q1 2026. And we're seeing strong momentum early in Q2 as well with quarter-to-date comps in the high single digits, which is validating that our strategy is working and our execution is becoming increasingly consistent. As noted in our pre-release last week, in Q1, we generated $13.9 million of EBITDA, which is more than doubling last year's $6.4 million. Our profit improvement was driven by exceptional comparable store sales growth of 13.9%, representing a two-year stack of 23.8%, and also marking 21 consecutive months of sales growth for the company. Our performance was broad-based. Sales increases across all product divisions and all store climate zones. While a portion of the quarter benefited from tax refund timing, I would like to highlight that our sales trends before and after the tax refund period on a two-year basis is in the upper teens, consistent with the momentum we delivered in Q3 and Q4 of 2025. And in the two-year upper teens, growth trend has continued now in Q2. Our sales growth is being driven by refinements of trend, style, and value of our core merchandising assortment. Plus, we also utilize extreme value deals periodically to add excitement to the treasure hunt for our customers. The strong performance of our core merchandising strategy gives us confidence in the durability and sustainability of our top line performance. Our gross margin rate expanded by 40 basis points, driven by improved merchandise margin rate. partially offset by increased fuel surcharge expense in the freight line. SG&A was well controlled and leveraged by 250 basis points versus last year. It was particularly encouraged by our transaction growth. Consistent with 2025 performance, nearly one half of our sales increase was driven by increased customer traffic, the key indicator that our product and brand are resonating. At the same time, we saw some meaningful improvement in our basket size, which is demonstrating that our customers are responding to the strength of our assortment and the compelling value that we're delivering. From a merchandise perspective, we saw disciplined execution across the business. Family footwear continued its momentum from Q4, with customers responding enthusiastically to expanded branded offerings at exceptional value across all genders. In footwear, off-price and extreme value strategy continues to gain momentum, driving both traffic and basket growth. Men's also delivered a very strong quarter, driven by increased relevance in streetwear trends for young men. Our updated strategy successfully balances trend-forward product for the younger customer, while continuing to serve the style and preferences of our core male customer with updated styling, compelling values, and improved in-stocks. Children's had another strong quarter, benefiting from improved in-stock levels and attention to detail in product selection. which creates stronger value positioning. As I mentioned on the Q4 call, our children's business has become both a cornerstone of our company and a model of consistent, disciplined execution. The team continues to deliver highly desired styles, consistent value, and improve inventory and stock positioning. Women's Accessories also posted meaningful gains, which is reflecting early success in our assortment adjustments to a more branded, trend-right product, and we were encouraged by customer response to improvements of our women's apparel business, especially in Missy. Women's apparel represents a significant opportunity as we continue to reposition our women's business to fully capture the style, trend, and sizing opportunities that we do see in the market. This product momentum is the result of continued refinement of our three-tiered good, better, and best strategy across all merchandising divisions. What's important to note here is that we're serving customers across across a wide range of income levels, including a meaningful portion of middle and higher income consumers. This creates a significant opportunity for us to expand our offering of recognizable brands at compelling prices that align with their style and trend expectations. At the opening price point, we continue to deliver strong value through our city score offering for budget conscious customers. The foundation of our business remains the better tier, which is typically priced between $7 and $12, where we provide a broad assortment of trend-right product that drives consistency and loyalty. And at the top end, we're continuing to expand our best tier through both fashion-forward product and branded extreme value opportunities, often with extreme discounts at the 75% off MSRP. These product strategies, combined with improved discipline in our open-to-buy process and continued benefits from our AI-driven allocation systems, are driving stronger inventory productivity and improved margin performance. In marketing, our objective is to really deepen the connection with our customers and reinforce the role and communities that we serve. In Q1, we extended the momentum from our highly successful holiday Joy Looks Good on You campaign by inviting customers to help modernize the city trends and bingo. Engagement exceeded expectations, generating strong social reach and viral moments, while also driving incremental store traffic. By quarter end, we had received a meaningful volume of customer submissions, and in Q2, we will select the finalists from the submissions, with the winning jingle expected to be deployed in the second half of the year. Now turning to operations, the SG&A leverage we delivered in the quarter reflects more consistent execution across the organization. As we improve execution, we're able to better leverage the fixed portion of our cost structure without adding commensurate expense as the business grows. I'm pleased with the progress across our stores, headquarters, and our distribution centers in controlling costs and improving overall operating disciplines. From a store growth point of view, we opened two new stores during the quarter, one in St. Louis and one in Baltimore. These two locations, along with the three new stores from last fall are serving as test stores for us as we refine our processes and prepare for accelerating store growth and i'm very pleased to report that our new stores are all performing above expectations. As a reminder here in stores, one of our primary points of differentiation. is our neighborhood store locations, which are embedded in communities where we've built trust over many, many years. The combination of these convenient proximity and strong word of mouth recommendations creates sustainable, powerful traffic drivers. Now I'll turn the call over to Heather to walk through Q1 financial results in more detail, as well as our updated 2026 outlook. And then I'll return after her remarks to discuss our priorities for the remainder of 26. Heather?